Taking Advantage of a Trading Opportunity
Not only is the loan market private and confidential, but it can also present real time pressures to market participants. Using their subscription to Loan Review Service (LRS), a UK-based fund manager was able to navigate these challenges profitably.
A UK-based fund manager has been a long-time subscriber to Debt Explained’s LRS. The LRS reports were essential reading for team members whenever there was a new investment. The reports would be pored over for any aggressive terms and would provide an essential component of the credit committee approval.
Typically the investment process includes a thorough and detailed due diligence process on all of their investments.
This manager was offered a trade on a name in which they had not previously invested. The seller wanted a commitment within two hours. Presented with a good opportunity but up against a tight deadline, the fund manager had to think outside the box.
The team logged on to Debt Explained’s LRS and dipped into the historic report on the company’s debt documents. Using the extensive information provided by LRS, the fund manager was able to get comfortable with the investment, obtain the relevant internal approvals and make the trade.
The loan was later re-sold, banking a trading profit of £0.5m.
The trade could not have been made without the team getting comfortable with the legal risks in the deal and the underlying asset. Their access to LRS provided them with that comfort enabling then to act on an outstanding opportunistic investment.